Bombardier to Sell Water-Bomber Plane Program

Bombardier Inc. said Monday it would sell its water-bomber plane program to British Columbia's Viking Air Ltd. so it could focus on its core business jet, commercial aircraft and rail-transportation operations.

Terms of the sale, which is expected to close in the next few months, weren't disclosed.

"This transaction supports our goal of rebuilding a clear path to profitable earnings growth and cash generation," said Alain Bellemare, chief executive of the Montreal-based plane and train maker.

Bombardier has focused much of its attention in recent years on its new CSeries passenger-jet program, and earlier this year secured a landmark order for up to 125 of its single-aisle jets from Delta Air Lines Inc. Still, the CSeries program has faced major cost overruns and long delays and left the company with a hefty debt load that it is working to pare.

Since October, Bombardier has raised $2.5 billion after agreeing to sell almost half its stake in the CSeries program to the Quebec government, and selling a stake in its train-making operations to a Quebec pension fund. It is also seeking financial aid from Canada's federal government.

The company said its decision to sell the Amphibious Aircraft program to Viking Air, which makes Twin Otter aircraft, came after "careful deliberation and a rigorous analysis." Bombardier said it hasn't produced any aircraft under the program since December.

Around 50 employees of the program will be transferred to other parts of the company, Bombardier said.

The Amphibious Aircraft program includes the Bombardier CL-415 water bomber and its different versions, as well as earlier versions of the aircraft.

"The Bombardier 415 is the aviation industry's benchmark amphibious aircraft and the backbone of firefighting missions around the globe," Viking Air said in a separate release. The deal includes the manufacturing rights for all versions of Bombardier's amphibious aircraft, plus product support, parts and service for the fleet of around 170 water bombers in service, Viking Air said.

Write to Judy McKinnon at [e-mail]

(END) Dow Jones Newswires

June 20, 2016 15:05 ET (19:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.